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AuthorPosts
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surveyor
ParticipantEstimates
Remember that the appreciation is a low estimate. We anticipate 4% but who knows it could be more. In those situations, the ROE would return more than 24%. So a 24% CAGR is very sustainable because of the low estimate of appreciation (which we carry out over a period of ten years). In the ROE calculation, cash flow should generally improve over time and appreciation should be higher than what you anticipate (not a huge amount, but decent).
By refinancing and getting that equity out to invest in more properties, making it work even harder, the ROE keeps getting better and better. It does get hard to calculate later and later though but so far it looks good.
Thanks SDR for the good words, the investments you make should make your family life better, not worse and we all have different situations that make certain investments unpractical. I know a few who want to get into real estate but they are unable to convince their spouse (which is pretty critical). For me, I am lucky that I am able to put money into both real estate and the stock market. My stock market account has been going gangbusters, too! Still, I have run the numbers and based on effort, return, and making all your money work for you (including your home’s equity), real estate was the only way to go.
I will say that because I am able to invest both in real estate and the stock market, I can tell you in 10 years which performs better. Stick around for that. Hahahaha.
ParticipantEstimates
Remember that the appreciation is a low estimate. We anticipate 4% but who knows it could be more. In those situations, the ROE would return more than 24%. So a 24% CAGR is very sustainable because of the low estimate of appreciation (which we carry out over a period of ten years). In the ROE calculation, cash flow should generally improve over time and appreciation should be higher than what you anticipate (not a huge amount, but decent).
By refinancing and getting that equity out to invest in more properties, making it work even harder, the ROE keeps getting better and better. It does get hard to calculate later and later though but so far it looks good.
Thanks SDR for the good words, the investments you make should make your family life better, not worse and we all have different situations that make certain investments unpractical. I know a few who want to get into real estate but they are unable to convince their spouse (which is pretty critical). For me, I am lucky that I am able to put money into both real estate and the stock market. My stock market account has been going gangbusters, too! Still, I have run the numbers and based on effort, return, and making all your money work for you (including your home’s equity), real estate was the only way to go.
I will say that because I am able to invest both in real estate and the stock market, I can tell you in 10 years which performs better. Stick around for that. Hahahaha.
ParticipantOn and On
Like I said, I could go on and on and that still wouldn’t be enough.
The Real Estate Return on Equity (ROE) does go down if you do not take care of it. However, by re-leveraging the property, taking out the appreciation through re-financing, and then re-investing that money into more real estate, the ROE returns to its form of 24% and more. Gradually the cash flow improves, the tax basis goes down, but beyond that I do not have actual data. I’ll let you know next year! I am still willing to say that my real estate investing will beat the S&P.
The formula does actually work for San Diego. However, instead of a 24% return, San Diego gives an 11.5% return (there was someone else who asked for an evaluation of a condo property and it gave a 11.5% return with 0% appreciation). The big problem with San Diego of course is the big negative cash flow, but with the formula, it shows you why you shouldn’t buy San Diego’s properties (which return 11.5%) vs. out-of-state properties (which return 24% OR MORE).
In any case, I have always stated in my posts to AVOID CALIFORNIA. This does include San Diego.
Note: Leverage is not commonly used by most investors in the stock market. Leverage is used by most real estate investors.
Your 24% model is not compounded and diminishes every year. Otherwise your $40k down would be worth $3.5M in 20yrs (or $1B in 40yrs).
Your math is correct but your context is wrong. The $200k property, appreciating at 4% a year, becomes $960k over 20 years. However, it is correct to say that the initial $40k investment GREW AND GENERATED $3.5 MILLION worth of value over 20 years. Over the same time, your $40k in the stock market will have turned into only $270k. The 24% return of the real estate investing can be easily maintained through leverage and refinancing.
On and on and on….
ParticipantOn and On
Like I said, I could go on and on and that still wouldn’t be enough.
The Real Estate Return on Equity (ROE) does go down if you do not take care of it. However, by re-leveraging the property, taking out the appreciation through re-financing, and then re-investing that money into more real estate, the ROE returns to its form of 24% and more. Gradually the cash flow improves, the tax basis goes down, but beyond that I do not have actual data. I’ll let you know next year! I am still willing to say that my real estate investing will beat the S&P.
The formula does actually work for San Diego. However, instead of a 24% return, San Diego gives an 11.5% return (there was someone else who asked for an evaluation of a condo property and it gave a 11.5% return with 0% appreciation). The big problem with San Diego of course is the big negative cash flow, but with the formula, it shows you why you shouldn’t buy San Diego’s properties (which return 11.5%) vs. out-of-state properties (which return 24% OR MORE).
In any case, I have always stated in my posts to AVOID CALIFORNIA. This does include San Diego.
Note: Leverage is not commonly used by most investors in the stock market. Leverage is used by most real estate investors.
Your 24% model is not compounded and diminishes every year. Otherwise your $40k down would be worth $3.5M in 20yrs (or $1B in 40yrs).
Your math is correct but your context is wrong. The $200k property, appreciating at 4% a year, becomes $960k over 20 years. However, it is correct to say that the initial $40k investment GREW AND GENERATED $3.5 MILLION worth of value over 20 years. Over the same time, your $40k in the stock market will have turned into only $270k. The 24% return of the real estate investing can be easily maintained through leverage and refinancing.
On and on and on….
Participantupkeep, insurance, maintenance
upkeep, insurance, maintenance, property taxes, utilities, fees, and all other expenses are usually accounted for in the cash flow. I am sure there will be instances when you budget $2000 or so a year for maintenance and it exceeds that, but there will be years when you have budget 4% appreciation and you get 6% appreciation. So it all works out. Still, I only anticipate 4% appreciation.
true, you can leverage in the stock market, but that requires a high level of skill, knowledge, and expertise that I and most other investors do not have. I’m pretty sure I can figure it out, but I’d rather kind of go into real estate, let everything fly on automatic and then kind of check back into it when I feel like it, as opposed to having to check the stock market every hour.
Like I said earlier, real estate is kind of like individual stock picking. I still understand real estate better than the stock market though and its slow moving nature tends to be more conducive to predictability as opposed to the stock market’s gyrations.
I agree that property management companies (they are charging me 10% of income btw) are not trying to save you money. However, their primary purpose is to let you keep an eye on the big picture. After all, you don’t expect the CEO of Ford to actually do the data entry and filing for his affiliiate in Hokanokee, Florida, do you? The property management is there to let you delegate and keep an eye on the bottom line – profitability. As a real estate investor, your job is to look for more properties and to do research, not to do gruntwork. When you start handling dozens of properties, you’ll be inundated with paperwork and you will have to hire other people to do it anyways.
Finally:
The bottom line is that if you are looking to optimize real estate you better be willing to get your hands dirty.
This statement is absolutely correct. Believe me, real estate has its advantages, and the stock market has its advantages. I actually invest in both! I still like real estate more though.
Participantupkeep, insurance, maintenance
upkeep, insurance, maintenance, property taxes, utilities, fees, and all other expenses are usually accounted for in the cash flow. I am sure there will be instances when you budget $2000 or so a year for maintenance and it exceeds that, but there will be years when you have budget 4% appreciation and you get 6% appreciation. So it all works out. Still, I only anticipate 4% appreciation.
true, you can leverage in the stock market, but that requires a high level of skill, knowledge, and expertise that I and most other investors do not have. I’m pretty sure I can figure it out, but I’d rather kind of go into real estate, let everything fly on automatic and then kind of check back into it when I feel like it, as opposed to having to check the stock market every hour.
Like I said earlier, real estate is kind of like individual stock picking. I still understand real estate better than the stock market though and its slow moving nature tends to be more conducive to predictability as opposed to the stock market’s gyrations.
I agree that property management companies (they are charging me 10% of income btw) are not trying to save you money. However, their primary purpose is to let you keep an eye on the big picture. After all, you don’t expect the CEO of Ford to actually do the data entry and filing for his affiliiate in Hokanokee, Florida, do you? The property management is there to let you delegate and keep an eye on the bottom line – profitability. As a real estate investor, your job is to look for more properties and to do research, not to do gruntwork. When you start handling dozens of properties, you’ll be inundated with paperwork and you will have to hire other people to do it anyways.
Finally:
The bottom line is that if you are looking to optimize real estate you better be willing to get your hands dirty.
This statement is absolutely correct. Believe me, real estate has its advantages, and the stock market has its advantages. I actually invest in both! I still like real estate more though.
Participantgn:
1. From my real estate seminars, first you think what kind of market do you want and then look at the city. For example, do you have a family and are on a single income? You probably need something that is definitely safe and cash flows. So you would choose based on that. If your household income was high and could take a little negative cash flow, you could choose a high appreciation location.
Once you choose a city and do your research, I would recommend finding a real estate agent there who would have a list of properties for you to look at. I’m in a real estate investing network, so we have specific requirements for our agents, but generally they are well versed in investor real estate issues, and for the most part are real estate investors themselves. Anyways, peruse the choices, and sometimes one visit is all it takes, assuming you’ve done the research and the numbers are ok with you.
2. If you chose a good real estate agent who is also an investor, ask for three property managers that they can recommend (if they can’t recommend two, that’s a warning sign). A lot of these agents have property managers or are property managers themselves. Once you have a list, you will have to interview them and ask them specific questions on what services they are expected to give to you.
3. It all depends on what you have already, what your personal situation is, what your time frame is, and how your financial situation is structured.
If you have a house or investment property here in San Diego, it is probably cash flow negative (especially if you leverage). So you would probably go find a place that has good cash flow and low appreciation to offset that negative cash flow.
If you are close to retirement (within 10 years) you should probably get a high cash flow property that won’t see much appreciation because you need the income.
If you have a family, you will need something that does cash flow a little, but has good appreciation and growth potential.
If you’re single and have little to no obligations, you can buy a high appreciation and no cash flow property.
Ideally you should have a good mix of appreciation and cash flow properties. They should complement each other and minimize the risk. If at the end of your real estate venture, the properties are giving you good cash flow, certainly you could buy more properties and keep going. You can also upgrade and get bigger and better properties as time goes on. I do recommend using your cash flow to build up your cash positions in order to help you manage turbulent times. Also, if your cash flow is good enough, you can start maxing out your Roth IRA’s and 401k’s (which is also a good way to diversify your money).
Honestly I have not been investing in real estate for a long time. It is just that I have learned a lot with the seminars and books that I have been reading. While I did start renting out my previous residence in 2002, realistically I only started pushing my real estate investor potential about 2.5 years ago. However, my occupation does deal a lot with land and real estate, so I didn’t have as much to learn as most people. I used to have a real estate license in my previous location (Guam) but I just did it more as a lark as opposed to trying to make it my profession. Also I suck at sales…
Participantgn:
1. From my real estate seminars, first you think what kind of market do you want and then look at the city. For example, do you have a family and are on a single income? You probably need something that is definitely safe and cash flows. So you would choose based on that. If your household income was high and could take a little negative cash flow, you could choose a high appreciation location.
Once you choose a city and do your research, I would recommend finding a real estate agent there who would have a list of properties for you to look at. I’m in a real estate investing network, so we have specific requirements for our agents, but generally they are well versed in investor real estate issues, and for the most part are real estate investors themselves. Anyways, peruse the choices, and sometimes one visit is all it takes, assuming you’ve done the research and the numbers are ok with you.
2. If you chose a good real estate agent who is also an investor, ask for three property managers that they can recommend (if they can’t recommend two, that’s a warning sign). A lot of these agents have property managers or are property managers themselves. Once you have a list, you will have to interview them and ask them specific questions on what services they are expected to give to you.
3. It all depends on what you have already, what your personal situation is, what your time frame is, and how your financial situation is structured.
If you have a house or investment property here in San Diego, it is probably cash flow negative (especially if you leverage). So you would probably go find a place that has good cash flow and low appreciation to offset that negative cash flow.
If you are close to retirement (within 10 years) you should probably get a high cash flow property that won’t see much appreciation because you need the income.
If you have a family, you will need something that does cash flow a little, but has good appreciation and growth potential.
If you’re single and have little to no obligations, you can buy a high appreciation and no cash flow property.
Ideally you should have a good mix of appreciation and cash flow properties. They should complement each other and minimize the risk. If at the end of your real estate venture, the properties are giving you good cash flow, certainly you could buy more properties and keep going. You can also upgrade and get bigger and better properties as time goes on. I do recommend using your cash flow to build up your cash positions in order to help you manage turbulent times. Also, if your cash flow is good enough, you can start maxing out your Roth IRA’s and 401k’s (which is also a good way to diversify your money).
Honestly I have not been investing in real estate for a long time. It is just that I have learned a lot with the seminars and books that I have been reading. While I did start renting out my previous residence in 2002, realistically I only started pushing my real estate investor potential about 2.5 years ago. However, my occupation does deal a lot with land and real estate, so I didn’t have as much to learn as most people. I used to have a real estate license in my previous location (Guam) but I just did it more as a lark as opposed to trying to make it my profession. Also I suck at sales…
ParticipantRE vs. SM
Most people, when looking at real estate as an investment, look only appreciation. However, appreciation is only one aspect to real estate investing. There are four aspects of real estate that contribute to its return:
1. Appreciation
2. Cash Flow
3. Loan Reduction (which tends to be really low, so it can be ignored)
4. Tax benefitsCash flow and tax benefits tend to vary per person so it’s difficult to just plop them into a return. Appreciation, true it tends to follow inflation, but take a look at this calculation:
S&P: $40,000 stuffed into index fund. Average 10% per year.
Real Estate: $40,000 downpayment on a $200k property, at a tax rate of 25%, appreciation is 4% per year, cash flows at 0.
Year 1
S&P(10%)=40k*0.1=4000
Real Estate(4%)=$200k*0.04=8000Real Estate even at inflation is giving you almost twice the amount of money as the S&P. Imagine that over ten years and the gap is actually quite large.
Let’s take it further:
Return on S&P (one year) = 10%
Return on real estate = (AP+CF+LR+TX)/DOWNPAYMENT =
(8000+0+0+200000/27.5*0.25) = 9818/40000 = 24%.
(by the way, these are numbers from my south carolina fourplex, so i’m not making up numbers. i did change the tax rate because my tax rate is actually at 33%).
So, S&P 10%, Real Estate 24%.
Still think the stock market makes your money work harder?
I’m not dissing the stock market. I still invest in it as much as I can. I just run the numbers and real estate performs better. Also, I understand real estate better than the stock market. So to each his own.
ParticipantRE vs. SM
Most people, when looking at real estate as an investment, look only appreciation. However, appreciation is only one aspect to real estate investing. There are four aspects of real estate that contribute to its return:
1. Appreciation
2. Cash Flow
3. Loan Reduction (which tends to be really low, so it can be ignored)
4. Tax benefitsCash flow and tax benefits tend to vary per person so it’s difficult to just plop them into a return. Appreciation, true it tends to follow inflation, but take a look at this calculation:
S&P: $40,000 stuffed into index fund. Average 10% per year.
Real Estate: $40,000 downpayment on a $200k property, at a tax rate of 25%, appreciation is 4% per year, cash flows at 0.
Year 1
S&P(10%)=40k*0.1=4000
Real Estate(4%)=$200k*0.04=8000Real Estate even at inflation is giving you almost twice the amount of money as the S&P. Imagine that over ten years and the gap is actually quite large.
Let’s take it further:
Return on S&P (one year) = 10%
Return on real estate = (AP+CF+LR+TX)/DOWNPAYMENT =
(8000+0+0+200000/27.5*0.25) = 9818/40000 = 24%.
(by the way, these are numbers from my south carolina fourplex, so i’m not making up numbers. i did change the tax rate because my tax rate is actually at 33%).
So, S&P 10%, Real Estate 24%.
Still think the stock market makes your money work harder?
I’m not dissing the stock market. I still invest in it as much as I can. I just run the numbers and real estate performs better. Also, I understand real estate better than the stock market. So to each his own.
ParticipantBSR:
I think 4plexowner and I went through this whole discussion on the pros and cons of out-of-state real estate investing awhile back. Suffice it to say that there are many aspects that cannot just be posted in a website and that you really have to do your homework, research, time, and probably an important part, patience.
Different real estate markets act in different ways. If you want high appreciation, there are the southern states – North Carolina, South Carolina, Georgia, Texas. These places are going up on the real estate cycle (although North Carolina might be near or at its peak). These places, however, do not cash flow or at least do not do it well. I have a property in South Carolina that basically cash flows, but that is because it is on an interest only loan. Still, it is doing well, has had a few vacancies, but is fully rented now.
If you are looking for more cash flow and modest to low appreciation, you will have to look at Idaho, Alabama, parts of Louisiana, Tennessee, Missouri.
Typically the areas that are doing well right now are areas where people are moving to in mass droves. No brain science there. Also, every other month, money.cnn.com will have a real estate article about where the best places to live are or where the cheapest real estate prices are, etc. I hang the listing on a wall and see if there are any good properties in those areas.
I have a personal contact in Utah so I know that market isn’t doing particularly well right now. It hit its peak and is going down. I am avoiding Utah right now.
Some of the rules that I follow however regarding real estate investing in these markets:
1) Invest only in major cities or at least close suburbs
2) Try try try to buy a four plex or more. Most of the problems real estate is having right now is in SFRs and condos. Also, buying multi-units allows you to use economies of scale and lower per-unit costs. Also, most real estate action is SFR/condos or high end commercial properties. There is less competition for properties with four units and 20 units (too small for big companies, and too large for the small fry).
3) Use ROE calculation to get properties that return 25% to 30% or more.
4) If using borrowed money as downpayment, try to get Cash on Cash of (interest rate + 4%).
5) Keep per unit cost down, under $175k (many places have per unit costs of around $30k, which is terrific, to $70k or more, which is where it starts to get expensive).
6) Avoid places where there are a lot of investors. Of the places I listed above, Missouri fits that designation (you can still get decent numbers from it though and it hasn’t gone to a bubble like Arizona has).
7) Avoid California, Florida, Arizona, New Jersey, New York, Nevada (and other bubble areas).
8) Use loopnet.com to find multiunits in various locations in the country.There are more and I could go on and on and on.
Regarding property management, I have three property managers and they have to varying degrees done well. One probably required more management than anything, but it is very necessary to use property managers when doing out-of-state investing, but it is also necessary because you want to spend your time researching properties and not dealing with tenant problems. The more you deal with the tenant, the less patience you have for real estate investing in general. Still, I was able to choose good property managers and they have not given me truly bad headaches. Of course it helps to choose good property managers, but also to choose good properties that minimize problems.
Despite many comments here to the contrary, I do believe real estate on a percentage basis returns better and makes your money work harder than the stock market. I invest in real estate not because the dollar is going down or it’s not a bubble or any other reason that has popped up recently but because it creates more opportunity for wealth than any other investment vehicle.
Still, I do invest in both the stock market and real estate market but that’s more to diversify and lower my taxes than for any other reason. If nothing else, seeing your taxes go down to zero because of real estate is a powerful enough reason to consider real estate investing.
But like I said, real estate investing is more like individual stock picking and it does require more work than the stock market. Ultimately, however, time and demographics are on your side. There are more people coming and being born into the U.S. and they need a place to stay. It is difficult and expensive to build a house. It’s difficult to get a loan to buy a house (supposedly). And now people are being foreclosed and they have to find a place to stay. To me, that means investment real estate has a lot of potential.
ParticipantBSR:
I think 4plexowner and I went through this whole discussion on the pros and cons of out-of-state real estate investing awhile back. Suffice it to say that there are many aspects that cannot just be posted in a website and that you really have to do your homework, research, time, and probably an important part, patience.
Different real estate markets act in different ways. If you want high appreciation, there are the southern states – North Carolina, South Carolina, Georgia, Texas. These places are going up on the real estate cycle (although North Carolina might be near or at its peak). These places, however, do not cash flow or at least do not do it well. I have a property in South Carolina that basically cash flows, but that is because it is on an interest only loan. Still, it is doing well, has had a few vacancies, but is fully rented now.
If you are looking for more cash flow and modest to low appreciation, you will have to look at Idaho, Alabama, parts of Louisiana, Tennessee, Missouri.
Typically the areas that are doing well right now are areas where people are moving to in mass droves. No brain science there. Also, every other month, money.cnn.com will have a real estate article about where the best places to live are or where the cheapest real estate prices are, etc. I hang the listing on a wall and see if there are any good properties in those areas.
I have a personal contact in Utah so I know that market isn’t doing particularly well right now. It hit its peak and is going down. I am avoiding Utah right now.
Some of the rules that I follow however regarding real estate investing in these markets:
1) Invest only in major cities or at least close suburbs
2) Try try try to buy a four plex or more. Most of the problems real estate is having right now is in SFRs and condos. Also, buying multi-units allows you to use economies of scale and lower per-unit costs. Also, most real estate action is SFR/condos or high end commercial properties. There is less competition for properties with four units and 20 units (too small for big companies, and too large for the small fry).
3) Use ROE calculation to get properties that return 25% to 30% or more.
4) If using borrowed money as downpayment, try to get Cash on Cash of (interest rate + 4%).
5) Keep per unit cost down, under $175k (many places have per unit costs of around $30k, which is terrific, to $70k or more, which is where it starts to get expensive).
6) Avoid places where there are a lot of investors. Of the places I listed above, Missouri fits that designation (you can still get decent numbers from it though and it hasn’t gone to a bubble like Arizona has).
7) Avoid California, Florida, Arizona, New Jersey, New York, Nevada (and other bubble areas).
8) Use loopnet.com to find multiunits in various locations in the country.There are more and I could go on and on and on.
Regarding property management, I have three property managers and they have to varying degrees done well. One probably required more management than anything, but it is very necessary to use property managers when doing out-of-state investing, but it is also necessary because you want to spend your time researching properties and not dealing with tenant problems. The more you deal with the tenant, the less patience you have for real estate investing in general. Still, I was able to choose good property managers and they have not given me truly bad headaches. Of course it helps to choose good property managers, but also to choose good properties that minimize problems.
Despite many comments here to the contrary, I do believe real estate on a percentage basis returns better and makes your money work harder than the stock market. I invest in real estate not because the dollar is going down or it’s not a bubble or any other reason that has popped up recently but because it creates more opportunity for wealth than any other investment vehicle.
Still, I do invest in both the stock market and real estate market but that’s more to diversify and lower my taxes than for any other reason. If nothing else, seeing your taxes go down to zero because of real estate is a powerful enough reason to consider real estate investing.
But like I said, real estate investing is more like individual stock picking and it does require more work than the stock market. Ultimately, however, time and demographics are on your side. There are more people coming and being born into the U.S. and they need a place to stay. It is difficult and expensive to build a house. It’s difficult to get a loan to buy a house (supposedly). And now people are being foreclosed and they have to find a place to stay. To me, that means investment real estate has a lot of potential.
Participantindex funds
If an investor does not know a whole lot about investing and is not willing to put up with the work/research/reading necessary to learn, I would recommend broadly based index funds (like the vanguard VFINX). The stock market will fall sometime but if you spread your risk over time you should come out ahead. Investing is by its own nature risky. Use the 401k/IRA’s to minimize your taxes, invest in the index funds, and then live your life. There are too many things to do instead of living and dying on the stock market.
While I would certainly recommend real estate investing, it too takes as much work as picking individual stocks and has many pitfalls. Again, if you are not willing to devote your time to it, you are better off just sticking to investing basics. Once you can handle the basics, then you can stretch yourself out some more and then go stock picking and all that.
Finally, in order to answer your question, I have been investing in metals and mining stocks, vanguard’s energy fund, and index funds. It has done somewhat well (one stock I chose, BHP, took off like a rocket the past year). From what I’ve been hearing and seeing, the China index funds, a lot of international funds (like the Brazil ETF) have took off and done well. Still, more than half of my portfolio is in VFINX and I am cashing out a lot of my funds to build up my VFINX (my time frame is 20 years). My “play” money only takes up about 20% of my whole portfolio.
So… basically metals/mining, China, Brazil, and energy. However, these stocks are VERY volatile. They tend to swing 1% to 5% over the course of a week. So they aren’t safe.
Remember, just stick to the basics and let it go. It’s fun to see money grow, but it will go on without you and it’s best to let it grow and not obsess over it.
As always, take this advice with a grain of salt and note that the person who runs this site is able to answer your questions better…
Participantindex funds
If an investor does not know a whole lot about investing and is not willing to put up with the work/research/reading necessary to learn, I would recommend broadly based index funds (like the vanguard VFINX). The stock market will fall sometime but if you spread your risk over time you should come out ahead. Investing is by its own nature risky. Use the 401k/IRA’s to minimize your taxes, invest in the index funds, and then live your life. There are too many things to do instead of living and dying on the stock market.
While I would certainly recommend real estate investing, it too takes as much work as picking individual stocks and has many pitfalls. Again, if you are not willing to devote your time to it, you are better off just sticking to investing basics. Once you can handle the basics, then you can stretch yourself out some more and then go stock picking and all that.
Finally, in order to answer your question, I have been investing in metals and mining stocks, vanguard’s energy fund, and index funds. It has done somewhat well (one stock I chose, BHP, took off like a rocket the past year). From what I’ve been hearing and seeing, the China index funds, a lot of international funds (like the Brazil ETF) have took off and done well. Still, more than half of my portfolio is in VFINX and I am cashing out a lot of my funds to build up my VFINX (my time frame is 20 years). My “play” money only takes up about 20% of my whole portfolio.
So… basically metals/mining, China, Brazil, and energy. However, these stocks are VERY volatile. They tend to swing 1% to 5% over the course of a week. So they aren’t safe.
Remember, just stick to the basics and let it go. It’s fun to see money grow, but it will go on without you and it’s best to let it grow and not obsess over it.
As always, take this advice with a grain of salt and note that the person who runs this site is able to answer your questions better…
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AuthorPosts
